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Latin America’s female staircase fall during COVID-19

Authors: Erika Martínez Fernández, Lina Tafur, Pablo Cortés, Susana Martinez-Restrepo

COVID has had a greater effect on women’s labor markets in Latin American countries. As a result, fewer women are participating in the labor market, and their unemployment has increased significantly. This phenomenon, coined by some experts as a She-cession, [1] has had a powerful effect on women with young children and young women.


COVID-19 has triggered an economical and sanitary crisis which has had a more significant impact on women. According to the Economic Commission for Latin America and the Caribbean (ECLAC),  the pandemic led to a general setback of more than a decade of the progress achieved in women’s labor participation and unemployment rates within less than a year. [2] The International Labor Organization (ILO) estimates that 13 million women in Latin America saw their jobs disappear due to the COVID-19 pandemic [3] and an average loss of 6.7% of the region’s Gross Domestic Product (GDP). [4]

HOW TO EXPLAIN THE DIFFERENTIAL EFFECT THE CRISIS HAD ON WOMEN? 

Increasing unemployment rates and inactivity have induced a She-cession and led to a female staircase fall, leaving many women out of the labor market. [5,6] Women are losing their status in the labor market as they shift from formal labor to informal jobs; women in the informal labor market become unemployed, and unemployed women become inactive as they increasingly engage in domestic work. [7] Three facts help to cast light on the differential effects of the  COVID-19 crisis on women: 1) the shock of female-dominant economic sectors, 2) gender gaps in digital skills in a time of automation and technological change, and 3) the disproportionate increase in caregiving work. 

The pandemic has hit female-dominated sectors the hardest. In-person services such as restaurants, tourism, beauty salons, domestic cleaning services, education services, and care activities have been some of the most affected occupations by social-distancing mandates and quarantines to curb the spread of the virus. [8] COVID-19 has also accelerated the automation of work and the adoption of certain technologies in Latin America, such as e-commerce platforms, delivery services, and software development for services and products, which have facilitated buying any product online instead of purchasing on-site. [9] This process, propelled by changes in people’s behaviors and preferences to meet consumer demands during the pandemic, [10] has hurt women’s occupations the most since they are more likely to have administrative and routinary jobs that are more vulnerable to replacement by pandemic-induced automation. [11] Vulnerable women were also more likely to have limited digital skills before the pandemic, which restrained their ability to adapt their economic activities (and even homeschooling) to the pandemic’s new needs, behaviors, and preferences. Such a dynamic is consistent with the World Economic Forum’s (WEF) pre-pandemic prediction, estimating that three out of every four jobs lost in the next ten years due to automation would be performed by women. [12]

Moreover, measures to control the spread of the virus have induced the closure of schools and daycare centers, which has increased even more women’s use of time on caregiving at domestic shores and, ultimately, raised inactivity rates among women. In Latin America, before the pandemic, women contributed 73% of the time spent on unpaid work at home. [13] It is expected for this statistic to be more severe during the pandemic.

The following sections will help to illustrate the shock experienced by millions of women in Latin America who continue to struggle to overcome the historical barriers they have faced to participate in the labor market and how they have amplified since the beginning of COVID-19. 

THE LONG-LASTING BARRIERS TO LABOR MARKET ACCESS IN LATAM

Latin American countries with the highest COVID-19 cases exhibit higher losses in Labor Force Participation (LFP) rates. Figure 1 shows the relationship between LFP percentage change rates during 2019 and 2020 for each sex and the number of COVID-19 cases for every 10,000 people by August 2020. As seen, there is a strong correlation between the prevalence of COVID-19 and the different levels of LFP affectations. Chile and Brazil, two countries heavily afflicted by the pandemic by August 2020, exhibited the most significant declines in LFP rates. 

Source: Author’s calculations, based on ILO modeled employment data from ILOSTAT Data

Figure 1 is a glimpse that reflects how women were the most affected by social distancing mandates and quarantines.  In Latin America, both men and women showed gradual, though slow, progress regarding labor force participation until the advent of the COVID-19 pandemic. Over the past three decades, the Latin American average for women’s LFP rate increased from 42,2% in 1990 to 53% in 2019. Despite this advancement, female’s LFP rates remained low compared to men, for whom it shifted from 82% in 1990 to 78,8% in 2019. [14] In this context, COVID-19’s impact reversed the gains women had achieved in LFP to 1990’s levels. For example, as seen in Figure 2 B, in Peru, females’ LFP rate dropped by 10,8 pp between 2019 and 2020, compared to 4,4 pp for males. [15] In other words, women’s LFP rate in Peru during the third quarter of 2020 was approximately the same as in 1996. [16]

Before the pandemic, women were more affected than men by barriers to entry into the labor market, such as the burden of caregiving and unpaid domestic work, discrimination, or segregation. The adverse effects of the pandemic amplified these barriers. As seen in Figures 2 A and 2 B, women’s LFP rates in 2020 were far behind men’s. Almost every country in Latin America reached gender gaps above 20 pp, approximately twice the gender gap observed for the same period in countries like the United States or Canada. [17] Women’s LFP rates reflect structural factors which reproduce unconscious biases and gender stereotypes, discrimination, and a highly segregated sexual division of labor. [18]

Source: Author’s calculations, based on ILO modeled employment data from ILOSTAT Data

Women’s participation in the labor market has undergone a rocky way. Although women have increased their participation, on average, they occupy jobs with lower wages and are more prone to labor instability than men. [19] This scenario made women more vulnerable to economic shocks before the pandemic; Therefore, the consequences of the COVID-19 crisis meant a staircase fall or a downward spiral that affected female participation in the labor market and employment.  

BACK TO THE PAST: THE DRAMATIC UNEMPLOYMENT FOR LATIN AMERICAN WOMEN

Before the pandemic, Latin America was already one of the regions with the highest unemployment rates for women globally, reaching 9.7% compared to 6,8% in men by 2019. Some of the constraints women face are worrisome considering that, by 2019, unemployment gender gaps exceeded 5 pp in some countries in the region. In contrast, other geographies, like Western Europe, kept gender gaps below 2 pp. [20,21] As seen in Figure 3 A, women’s unemployment rates increased significantly from 2019 to 2020 due to COVID-19. In seven of the nine countries considered in this analysis, including Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Mexico, Paraguay, and Uruguay, women’s change in unemployment rates outpaced men. Colombia and Costa Rica cases are particularly alarming as the unemployment rate for women increased from 12,8% and 15% to 19% and 22,6%, respectively.

Source: Author’s calculations, based on ILO modeled employment data from ILOSTAT Data

As mentioned earlier, the pandemic has mostly affected female-dominated industries, increasing unemployment rates up among women. In 2019, around 80% of women in Latin America occupied jobs in the service, trade, or retail industries, compared to 55% of men. This situation immediately affected job loss and drove female unemployment up in 2020, affecting more than 81 million women in the service sector across Latin America, such as domestic services, hotels and restaurants, education, and retail, compared to 78 million men in the same industry. [22]

Some businesses have rolled out their automation plans due to capital investments to tap into an era of tech change and reconfiguration of preferences and behaviors, which has accelerated during the pandemic. However, this situation is changing labor market demand for work and may affect young women in the short and long term if their digital skill gaps continue widening. According to the WEF, globally, the workforce is automating faster than expected, displacing 85 million jobs in the next five years. [23] Note that this change is expected to create more jobs than it will destroy; However, the gaps in digital skills, such as 21st-century competencies [24] required to seize such positions, make women most at risk from disruption. For example, in 2021, in the top emerging professions such as in Cloud Computing, women make up 14% of the workforce; in Engineering, 20%; and in Data and A.I., 32%. [25]

The crisis has hit young women the hardest in terms of unemployment. Figure 4 A shows how, in almost every country taken into the analysis, unemployment rates for young women nearly doubled. For instance, in Costa Rica and Colombia, young women’s unemployment increased 13,8 pp and 7,7 pp, respectively, in just one year. This situation has short-term and long-term implications. In the short term, it may include the rise in crime, the erosion of social cohesion, and the deterioration of wages and quality jobs, which are particularly severe for women. In the long term, it might affect the sustainability of public expenditure. [26]

Source: Author’s calculations, based on ILO modeled employment data from ILOSTAT Data

In a nutshell, the She-cession originated by the pandemic means a general trend of women losing jobs at a higher rate than men, as discussed above. However, the situation may be more grueling for half of the female population in Latin America who work in the informal sector, implying they have been excluded from unemployment data even as they continue facing severe barriers to access the labor market. 

CONSIDERATIONS FOR POLICY ACTION

Economic shocks such as the one created by the pandemic triggered an employment crisis that also represents an opportunity. Latin American countries have the chance to rethink their recovery process and make employment policies more inclusive for women. The efforts to overcome low female LFP and high unemployment rates, especially among young women, entail various challenges that policymakers must address. 

The care economy is essential to the economic recovery

The increased time women had to allocate to care and chores due to the closure of schools and childcare centers forced millions of women to leave the labor market. Therefore, investments in the care economy are essential to the region’s economic recovery to relieve women’s burden during COVID-19 and get them back into the workforce. COVID-19 has led momentum for this approach.  Montevideo and Bogota have pioneered creating a care system that works with care mobile units to provide caregiving services for the sick, the youngest children, the disabled, the elderly, and resting, recreation services, and training spaces for caregivers. [27]

New alternatives of work are here to stay and may benefit women the most

Although working from home has been challenging for women, especially single mothers with young children who require homeschooling, it has opened the window for various alternatives. Working remotely/from anywhere, or the hybrid model of work that combines in-office and remote work, are flexible work options that were uncommon before the pandemic when in-person work ruled. The flexibility of these new alternatives could essentially benefit women. It might allow them to combine work and motherhood with flexible schedules and reduce commuting time, which women strongly value, [28] as long as employers adapt to these demands by tuning in with women’s needs. However, flexibility may benefit only women who perform jobs remotely and are equipped with digital tools and skills. [29] For women who work in the informal sector, which accounts for 55,2% by 2019, in the nine countries considered in this analysis, [30] flexibility may be less promising and may benefit formalization programs. Therefore, it is essential to highlight that each country must adjust its national laws and regulations to the new work alternatives to place the standards that could become an equalizer for women in Latin American labor markets. 

Building back better: An economic recovery that works for all, especially for young women

Available data confirms that young women have endured the worst part of unemployment and inactivity caused by the COVID-19 crisis compared to other populations. This situation will not change alone in the future and requires a straightforward approach from a gender perspective. Recovery policies that focus on traditionally male sectors such as construction and infrastructure need to introduce quotas for women and young women combined with training and recruitment efforts. In addition, tax and fiscal reforms need to create incentives for businesses to promote women’s LFP and decrease unemployment rates.

Latin American authorities and businesses can build back better if policies focus on designing and implementing education and employment programs for the youth, especially women. Such training and employment programs should emphasize 21st-century competencies and skills for jobs with the highest demand, including A.I. specialist, Big Data analyst, data engineer, software developer, Python developer, and data scientist. These are jobs in which, currently, women hold less than 35% of the positions. [31] In addition, promoting vocational training, digital inclusion, and digital skills development for the most vulnerable population that works in the informality can also bring new economic opportunities for women working in the informal sector. 


[1] She-cession: refers to a general trend that occurred during the pandemic, where women lose their jobs at a higher rate than men.

[2] CEPAL 2021. “La Autonomía Económica De Las Mujeres En La Recuperación Sostenible Y Con Igualdad”. Informe Especial COVID-19. CEPAL.

[3] International Labor Organization. “13 Million Women In Latin America And The Caribbean Saw Their Jobs Disappear Due To The COVID-19 Pandemic”. 2021. International Labor Organization. [en línea] disponible en https://www.ilo.org/caribbean/newsroom/WCMS_775068/lang–en/index.htm. 

[4] World Bank. 2021. “Latin America and The Caribbean”. Global Economics Prospects, World Bank. 

[5] García-Rojas, Karen, Paula Herrera-Idárraga, Leonardo Fabio Morales-Zurita, Natalia Ramírez-Bustamante, and Ana María Tribín-Uribe. 2021. “(She)Cession: The Colombian Female Staircase Fall”. Borradores De Economía, Banco de la República, 2021.

[6] “Brazil In “Shecession”​​​​​​​​​​​​​​ As Women Feel Larger Burden of Job Crisis”. 2021. Wilson Center. https://www.wilsoncenter.org/blog-post/brazil-shecession-women-feel-larger-burden-job-crisis.

[7] García-Rojas, Karen, Paula Herrera-Idárraga, Leonardo Fabio Morales-Zurita, Natalia Ramírez-Bustamante, and Ana María Tribín-Uribe. 2021. “(She)Cession: The Colombian Female Staircase Fall”. Borradores De Economía, Banco de la República, 2021.

[8] Martínez-Restrepo, Susana, Lina Tafur-Marín, Pablo Cortés, Erika Martínez. 2020. “Reactivación Económica con Enfoque de Género”. Bogotá: CoreWoman.

[9] Ibid.

[10] “COVID-19: Implications for Business”. 2021. Mckinsey & Company. [Online] available at https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business.

[11] World Economic Forum. 2021. “The Global Gender Gap Report.” World Economic Forum.

[12] World Economic Forum. 2016. “The Future of Jobs.” World Economic Forum.

[13] Piras, Claudia. 2021. “Las Mujeres En América Latina Y El Caribe Enfrentan Mayores Riesgos Ante El Coronavirus – ¿Y Si Hablamos De Igualdad?”. ¿Y Si Hablamos De Igualdad?, Banco Interamericano de Desarrollo. [en línea] disponible en  https://blogs.iadb.org/igualdad/es/mujeres-enfrentan-mayores-riesgos-ante-coronavirus/.

[14] “ILO Data Explorer”. 2020. International Labor Organization. [online] available at https://www.ilo.org/shinyapps/bulkexplorer1/?lang=en&segment=indicator&id=EAP_2WAP_SEX_AGE_RT_A.

[15] Ibid.

[16] “Tasa De Participación En La Fuerza Laboral, Mujeres (% De La Población Femenina Entre 15-64 Años) (Estimación Modelado OIT) – Peru | Data”. 2021. Datos Banco Mundial. 

[17] “ILO Data Explorer”. 2020. International Labor Organization. [online] available ar https://www.ilo.org/shinyapps/bulkexplorer1/?lang=en&segment=indicator&id=EAP_2WAP_SEX_AGE_RT_A.

[18] Marchionni, Mariana, Pablo Gluzmann, Joaquin Serrano, and Bustelo Monserrat. 2019. “Participación Laboral Femenina”. Banco Interamericano de Desarrollo.

[19] Seguino, Stephanie, and Elissa Braunstein. 2018. “The Costs of Exclusion: Gender Job Segregation, Structural Change and The Labour Share of Income”. Development And Change 50 (4): 976-1008. doi:10.1111/dech.12462. 

[20] There are several factors that can explain the big difference between women’s unemployment rates in high-income countries, and low-and middle-income countries, these include: the structure of labor market, social norms, female poverty rates, the burden of unpaid caregiving work, among others.

[21] Djankov, Simeon, Pinelopi Koujianou, Marie Hyland, and Eva Zhang. 2021. “COVID-19 Widens the Gender Gap In Labor Force Participation”. Peterson Institute for International Economics. [online] available at https://www.piie.com/blogs/realtime-economic-issues-watch/covid-19-widens-gender-gap-labor-force-participation.

[22] “ILO Data Explorer”. 2019. International Labor Organization.[online] available at      https://www.ilo.org/shinyapps/bulkexplorer1/?lang=en&segment=indicator&id=EAP_2WAP_SEX_AGE_RT_A. 

[23] World Economic Forum. 2020. “The Future of Jobs.” World Economic Forum.

[24] 21st Century competencies are known as a set of competencies that include critical thinking, problem-solving skills, creative thinking,  interpretation and analysis of information, emotional intelligence, cognitive flexibility, adaptation to change. They are necessary for personal and occupational development in the 21st Century labor market (Martínez-Restrepo, et al., 2018).

[25] World Economic Forum. 2021. “The Global Gender Gap Report.” World Economic Forum.

[26] Fedesarrollo. 2017. “Informe Mensual Del Mercado Laboral: Desempleo Juvenil”. Bogotá: Fedesarrollo.

[27] Zambrano, Viviana. 2020. “Sistema distrital del cuidado, logro histórico para mujeres en Plan de Desarrollo.” Bogotá.gov.

[28] Ibarra, Herminia, Gillard, Julia, Chamorro-Premuzic, Tomas. 2020. “Why WFH Isn’t Necessarily Good for Women.” Harvard Business Review.

[29] Barrero, Jose Maria, Nicholas Bloom, and Steven J. Davis. 2021. “Why Working from Home Will Stick”. NBER Working Paper Series. Cambridge: National Bureau of Economics Research. 

[30] Countries include: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Mexico, Paraguay, and Uruguay. “ILO Data Explorer”. 2019. International Labor Organization. [online] available at  https://www.ilo.org/shinyapps/bulkexplorer1/?lang=en&segment=indicator&id=EAP_2WAP_SEX_AGE_RT_A.

[31]  World Economic Forum. 2021. “The Global Gender Gap Report”. World Economic Forum.